Invest in America Offers Incentive for Credit Union Members’ Car Purchase

(BUSINESS WIRE)--On Wednesday, January 7, representatives of General Motors and Chrysler Corporations announced the expansion of the “Invest in America” pilot discount purchase programs to credit union members. These programs are being made available to the members of the nation’s 7,900 credit unions. GM’s “Credit Union Member Discount Program” extends to March 31, 2009, and Chrysler’s “Credit Union Member Cash” rebate program extends through June 30, 2009.

With a certificate and proof of membership, a credit union member can receive a discount of 4.5% off the MSRP in addition to other available discounts on most General Motors products. With proof of credit union financing, a member can receive a rebate of $500 to $1,000 as specified for most vehicles from Chrysler (dealer participation is optional). The details of both these programs can be found at www.lovemycreditunion.org.

Although obviously impacted by levels of employment and general economic conditions, credit unions remain well capitalized and ready to lend to their members. Credit unions have continued to make automobile loans, mortgage loans, and loans for many other purposes to members throughout the recent economic struggles. Credit unions continue to be an available source of low-cost loans and capital, as well as providing the opportunity for members to participate in these discount auto purchase programs.

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Thanks to the Tennessee Credit Union League for the heads up on this great news.

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Federal Reserve Approves NADA-Backed Initiative Aimed at Increasing Inventory Financing

/PRNewswire-USNewswire/ -- Following President Bush's announcement Friday to provide $17.4 billion in bridge loans to General Motors and Chrysler, the Federal Reserve Board, in a related action, addressed a key request from the National Automobile Dealers Association by including floorplan securitizations in a new $200 billion credit facility the Federal Reserve is establishing.

The Federal Reserve on Friday clarified the eligibility requirements under the new Term Asset-Backed Securities Loan Facility (TALF) and, in doing so, for the first time included loans for dealer inventory financing as a qualifying asset class.

"This move meets a key need that NADA had identified for greater liquidity in the auto retailing marketplace," said Andy Koblenz, NADA vice president of legal and regulatory affairs.

The U.S. Department of the Treasury announced Nov. 25 that the Fed would be establishing the TALF credit facility, a $200 billion program designed to facilitate the issuance and sale of securitized auto loans. However, at the time the TALF was announced, it was unclear whether it would include loans for dealers at the wholesale level. That uncertainty has now been resolved.

In addition to confirming the eligibility of floorplans loans, the Federal Reserve also extended the term of TALF loans from one to three years and provided that TALF loans could have fixed or floating interest rates. These changes will make it easier for auto finance companies to use the TALF to issue floorplan securitizations.

"NADA's goal all along was to restore liquidity in the credit markets for all dealers and their customers," Koblenz added. "By working with the Federal Reserve and the Department of Treasury to ensure that floorplanning loans were included, NADA was able to give creditors confidence to once again make loans available to dealers to finance the inventory on their lots. This will, in turn, help ensure that dealers have at their dealerships the selection of vehicles that consumers want to buy."

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